Suppose we generalize this view of credit, remembering that the total amount of bank obligations is fairly stable, and that, though it may increase for a period of months at a time, this upward movement may be followed by a like period of decrease. It is certainly not an unfounded or violent supposition if we regard the total volume of bank credit as practically stable over a considerable period. This does not mean that no new credit is granted. It merely means that about as much is being canceled as is being granted. Looking at bank credit in the aggregate, then, it is not an "extension" of loans or accommodation, but it is a steady, consistent, more or less uniform means or machine used in bringing about the exchange of goods. With a certain existing level of prices and volume of business, a given volume of bank credit is brought into existence or, in other words, a given number of solvent borrowers present themselves to banks with requests for accommodation. They obtain the advances they want and transfer them to others who use them in canceling already existing obligations. If it be supposed that the banking system of a country is practically permanent, then the outstanding minimum level of bank credit may also be regarded as practically permanent. It is a permanent mechanism of exchange and not an "advance" which is to be repaid at any given moment. From this standpoint the element of time seems to figure but little in the fundamental analysis of bank credit transactions.

If bank credit is not primarily dependent upon the idea of time, what is the characteristic service performed by the bank which permits the institution to make a charge for the work it does? This is not a service of "lending" at all in the ordinary sense, but is a service of insuring or guaranteeing the existence of values. The essential function of the bank is that of making sure that given individuals may safely transfer values to others. The bank enters in as a buffer between the buyer and seller. It takes the risk, and the amount which it charges for this service is more nearly in the nature of an insurance premium than it is of a payment for "abstinence' from the immediate use of "money" or even of "wealth."